Suppose banks hold no excess reserves,the reserve requirement is 10%,and the cash-to-deposit ratio is 10%.
(a)If banks have $10 million in reserves what will the money supply be?
(b)How will your answer to (a)change if the Fed increases the reserve requirement to 20%?

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The Answer of Suppose banks hold no excess reserves,the reserve requirement is 10%,and the cash-to-deposit ratio is 10%.
(a)If banks have $10 million in reserves what will the money supply be?
(b)How will your answer to (a)change if the Fed increases the reserve requirement to 20%?

Suppose Banks Hold No Excess Reserves,the Reserve Requirement Is 10%,and